How has the United States invested in Central American countries and Why?

June 15, 2014 by Karen Hill | Filed Under: History

Beginning in the 1840s, American companies invested millions of dollars to open mines and grow cash crops throughout Central America, especially bananas and coffee.

More recently, American companies have been opening numerous factories there as well. Profits from these businesses have gone mostly into the pockets of American investors and a few wealthy Central American families.

Historically, Central American workers have been paid low wages. Land for subsistence farming has been scarce. The poor have been subject at any time to unemployment and starvation.

When the poor think there is no peaceful way to improve their lot, one thing they may do is rebel, causing civil war. Another is to move away or emigrate, often to the United States.

To protect U.S. investments in Central America, the United States has often intervened with military force.

In Guatemala in 1954, the United States covertly assisted in overthrowing the government of Jacobo Arbenz Guzman. The United States disapproved of Arbenz’s leftist politics. The United Fruit Company, a U.S. corporation, disliked his policy of redistributing their land to the poor.

In several countries, the United States supported strongmen as rulers, to keep the peace and allow American business to prosper.